I imagine you could automatically score a tennis game, using the accelerometer in the watch (detect sudden impulse upon striking the ball, and communicate with your opponent's watch). I assume from reading the app description it's not doing anything like that. Could be a cool enhancement / technical feat.
That would be impossible. A shot could go out as an unforced error or be a winner, all without the other player moving his hand.
This is an excellent application that's specific to watches, great idea :)